IMF: Algerian Government is Taking Unpopular Decisions to Counter the Oil Shock
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International Monetary Fund did not exclude the Algerian government’s imposition for new procedures that it described as “unpopular” in 2016, after those which were brought by the Finance Act like the increases on fuel, electricity, water and even taxes.
FMI expected a popular disappoint in the new year.
Director of the International Monetary Fund, Christine Lagarde, said in statements that were published by the German newspaper “Handelsblatt”, on Wednesday, that the next year, will be disappointing in light of the low productivity and the declining economies of the emerging countries, and the deterioration of oil prices, which destroyed the markets of oil-producing countries in particular.
“Handelsblatt” newspaper quoted “Lagarde” as saying that “Financial sector still suffers from weaknesses in many countries and financial risks are increasing in the emerging markets”, which threatens of a “disappointing level of global growth in 2016.”
“Weak productivity, the ageing societies, and the effects of the global financial crisis are all factors that block the growth which makes it weaker than the medium term’s expectations. Faced with the collapse of oil prices, all oil-producing countries are almost facing the same crisis. They are forced to take unpopular measures due to the collapse of oil prices especially. “
“A large number of countries that are affected by the decline of oil prices, make it deliberately adopt the austerity plan particularly through reducing subsidies on fuel prices, considering that the deterioration of oil prices may lead to lower fuel prices in the consuming countries, but increases in the producing countries.”
International Monetary Fund previously expressed concern about the public support for energy prices in the world, and called for a “reset of energy prices to a fair level that can help governments to meet their goals on the environment and also (…) the good public finance.”
Algeria denied, in the words of the Prime Minister, Abdelmalek Sellal, “begging” on the doors of the International Monetary Fund, but will works to diversify its sources of income in addition to encouraging the private sector to get out of oil dependency, which mortgaged the country for many years.